Scoreboard: Seeing red

A collapse in commodity prices in the previous session sparked a global sell-off of shares before rebounding, while major currencies strengthened against the greenback.

In US economic data, the ISM manufacturing index eased from 59.0 to 58.7 in November, above forecasts for a result near 57.8.

European shares eased on Monday as investors reacted to Friday's sharp fall in commodity prices by reducing interest in mining and oil stocks. The FTSEurofirst 300 index fell by 0.5 per cent, the German Dax fell for the first time in 13 days, down by 0.2 per cent, while the UK FTSE fell by 1.0 per cent. In London, trade shares in BHP Billiton fell by 2.2 per cent while Rio Tinto lost 1.2 per cent. 

US sharemarkets fell at the open of trade but promptly rebounded. Higher gold and oil prices led to a recovery in resource stocks. The latest economic data comforted investors. But shares in Apple fell by 2.3 per cent, weighing on the technology sector. Comments by New York Fed president William Dudley in afternoon trade that wages may be set to rebound, induced further selling. The Dow Jones was down 102 points at the start of trade but with a hour of trade to go the Dow was lower by 38 points or 0.2 per cent. The S&P 500 index was down by 0.7 per cent while the Nasdaq lost 62 points or 1.3 per cent. 

US treasuries fell on Monday (yields higher) as commodity prices rebounded (easing deflation jitters) and economic data came in stronger than expected. US 2-year yields rose by two points to 0.496 per cent while US 10-year yields rose by 5 points to 2.217 per cent.

Major currencies were stronger against the greenback in European and US trade on Monday. The euro rose from lows near $US1.2420 to near $US1.2505 and was around $US1.2475 in late US trade. The Aussie dollar rose from lows near US84.25c to around US85.30c and was around US85.10c in late US trade. And the Japanese yen lifted from ¥119.10 per US dollar to ¥117.87 and was near ¥118.30 in late US trade.

World oil prices rebounded on Monday. Data showed that lower oil prices make be affecting more marginal production with a 15 per cent drop in permits issued for new US shale oil wells in October. A weaker US dollar also served to boost commodity prices. A weaker greenback improves the purchasing power of European and Asian buyers for dollar-denominated commodities. Brent crude rose by $US2.39 or 3.4 per cent to $US72.54 a barrel. The US Nymex crude price rose by $US2.85 or 4.3 per cent to $US69.00 a barrel.

Base metal prices rose up to 1.7 per cent on the London Metal Exchange on Monday with copper leading the declines while the tin price rose just 0.2 per cent. Gold rose sharply on Monday with Comex gold futures up by US$42.90 an ounce or 3.7 per cent to $US1,218.10 per ounce. Iron ore rose by US80c to $US70.60 a tonne on Monday.

Ahead: In Australia, the Reserve Bank board meets. Data on government finance is released with building approvals, weekly consumer confidence and the balance of payments. In the US, data on auto sales is released with construction spending and weekly chain store sales data.

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